The hills are alive with the sound of music, as well as multiple offers! After years of relatively slow growth lagging behind the communities in the flats, the affluent hillside communities of Portola Valley, Los Altos Hills, and Woodside have rebounded strongly in the last year and are now attractive to many buyers who appreciate the large lots, rural charm, and great views. While all of these communities have seen strong appreciation recently, the focus is justifiably upon the highly desirable Los Altos Hills, which has seen the greatest surge in demand as reflected in its strong appreciation and the increase of new construction that can be found throughout this beautiful community.
Once the darling of Silicon Valley housing, primarily from 1998 to 2000 when prices skyrocketed and the hills became dotted with new homes built by freshly-minted IPO millionaires, the steam went out of this market with the bust of the dot-com bubble. Slower to recover than other markets, the Los Altos Hills bottomed out in 2009 with an average house price of “just” $1,908,388. The market recovered, but at a slower rate than in the flats of Los Altos. In 2013, one could almost buy an acre in the Los Altos Hills for the same price as a quarter acre in North Los Altos!
Yet by 2014, the great value and amenities provided by living in the Los Altos Hills once again have become apparent to home-buyers. Beyond the great value the town provides, one of the two main factors that led to this increase in demand is that nearby downtown Los Altos has become much more vibrant thanks to newly opened restaurants and stores revitalizing this formerly sleepy village. Secondly, the majority of the Los Altos Hills are in the Los Altos High School attendance area, and the Academic Performance Index score has jumped 100 points to a score of 895, making it almost on par with Palo Alto High School.
The strength of the housing market can be illustrated both via a recent sale as well as comparing housing statistics now with the low point of 2009. In March of this year, a nice home near Town Hall was listed for $6,998,000. In years past, the initial list price was a starting point to negotiate downward. Now, it is considered the starting bid. The home received multiple offers and jumped to $8,500,000 with an all-cash offer, closing at nearly $1,500 per square foot. While this much of a jump is an anomaly, the strength and desirability of the Los Altos Hills housing market is reflected in the statistics above. Even with this recent appreciation, DeLeon Realty remains bullish on the future appreciation of the Los Altos Hills. By historic standards, this town is still priced much lower relative to neighboring cities such as Los Altos and Palo Alto. DeLeon Realty projects the greatest appreciation either in the areas close to the village of Los Altos and in homes with Palo Alto schools. The greatest growth is projected for those eastern neighborhoods between Interstate 280 and Foothill Boulevard, as these areas have close proximity and even some walkability to increasingly dynamic downtown Los Altos.